The Australian dollar halted the short-term descending momentum for four consecutive days, and rallied 0.35 percent to $0.75650 against the U.S. dollar. It’s currently rising with following an ascending channel, depicted as chart 1, started from early May where the reversal occurred.
In a background of decreased real wages in the first quarter and the developed world’s highest debt-to-GDP ratio, consumers are reducing their cash for a rainy day, in which their savings levels have more than halved in five years. The rising cost of living intensifies the squeeze, with news that electricity prices are climbing as much as 20 percent in New South Wales next month.
As consumption accounts for more than half of gross domestic product, the highly indebted can be more sensitive to declines in income, which hence has negative impacts on consumer spending.
According to BIS (Bank of International Settlement), Australia’s household debt to GDP ratio has jumped……….
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